uploads///analyst recom

Reading Magellan Midstream Partners’ Target Prices after the 4Q17 Earnings


Nov. 20 2020, Updated 5:01 p.m. ET

MMP’s analyst recommendations

On February 2, 2018, Barclays cut Magellan Midstream Partners’ (MMP) price target from $78 to $76. On the same day, RBC cut MMP’s price target from $81 to $79. Of the analysts surveyed by Reuters, 47% rated Magellan Midstream Partners as a “buy,” and 37% rated it as a “hold.”

Notably, only 16% of the surveyed analysts rated MMP as a “sell.” The consensus target price for Magellan Midstream Partners is now $77.50. Its units are trading at $71.57. If Magellan Midstream Partners attains the target price, it would mean an upside of 8% in one year.

By comparison, 96% of the surveyed analysts rated Enterprise Products Partners (EPD) as a “buy,” and 74% rated Energy Transfer Equity (ETE) as a “buy.”

Article continues below advertisement

MMP’s capital projects

Magellan Midstream continues to progress on its capital projects. Some of the key projects include:

  • The storage and connectivity infrastructure under the Seabrook Logistics joint venture is expected to become operational in mid-2018.
  • Construction continues on a new dock at MMP’s Galena Park terminal. Its expected to become fully operational by the end of 2018.
  • Construction continues at MMP’s marine terminal in Pasadena. An initial 1 million barrels of storage is expected to become operational by early 2019.
  • The Wink crude oil pipeline and a refined products pipeline are expected to be operational in 2019.

Magellan spent ~$540 million on organic growth projects in 2017. It expects to spend $900 million in 2018 and $375 million in 2019 to complete projects that are already underway.

MMP’s guidance

Magellan Midstream expects to increase distributions by 8% for 2018. It expects to generate DCF (distributable cash flow) of $1.05 billion in 2018. That would be around 3% higher than MMP’s 2017 DCF.

The company expects 2018 DCF to be ~$1.08 billion if the capacity for spot shipments at the BridgeTex and Longhorn pipelines gets utilized. Magellan is targeting annual DCF growth of 5%–8% for 2019 and 2020.

For ongoing updates on Magellan Midstream Partners and this industry, be sure to keep checking in with Market Realist’s Midstream Oil and Gas page.


More From Market Realist

    • CONNECT with Market Realist
    • Link to Facebook
    • Link to Twitter
    • Link to Instagram
    • Link to Email Subscribe
    Market Realist Logo
    Do Not Sell My Personal Information

    © Copyright 2021 Market Realist. Market Realist is a registered trademark. All Rights Reserved. People may receive compensation for some links to products and services on this website. Offers may be subject to change without notice.